TaxTMI 
TaxTMI 
2024 (5) TMI 130
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....able and exempt services, and (c). Rs 1,31,19,301/- for non-payment of service tax on manpower service received from their overseas entity 2. The brief facts are that the appellant (Indian subsidiary of M/s Halcrow International Limited, United Kingdom)is engaged in the provision of 'Consulting Engineering Services' for various projects and is registered with the Service tax department vide Registration No. AABCH3579BST001. The appellant also provides services in different parts of India including Jammu & Kashmir. Services provided in the state of Jammu and Kashmir are exempt from service tax and therefore the Appellant is not paying any service tax on provision of such services., and reversed the CENVAT credit as per rule 6(3)(ii) read with rule 6(3)(A) of Credit Rules. During the period 2008-09 to 2013-14, the appellant also hired foreign employees for provision of services related to the domestic projects. These foreign employees were working on the payroll of the appellant and all the statutory requirements were fulfilled by the Appellant in this regard. During the audit of the records of the appellant, the department expressed reservations on the issue of a....
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.... service for the period prior to 1.04.2011 included the phrase 'the activities relating to business' which means that, any service used for providing the output service or used in relation to activities relating to business, would fall within the definition of Input service. In support of his submission, he relied upon the decision of Hon'ble Bombay High Court in the case of Commissioner of Central Excise v. Ultratech Cement Ltd., 2010 (20) S.T.R 577 (Bom.). 3.1 Consequently, the Accommodation services provided to staff of Rs. 1,61,209/-, the ld counsel submitted that the service of accommodation used by the employees of the Appellant, was in their official capacity, and was not used in relation to personal use of the employees. The service of accommodation was necessary for the purposes of providing the service of Consulting Engineer Services and is integrally connected with the same. This input service was being used by foreign delegates/ employees of other companies/consultants who visited India in connection with requirement of the Appellant's projects. Accordingly, these were essential for providing the output services. In this regard, the Learned Counsel placed....
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....case of Commissioner of Central Excise v. Tata Auto Comp Systems Ltd., 2012 (277) Ε.Ε.Τ. 315 (Kar.), Commissioner of Central Excise v. Bell Ceramics Ltd, 2012 (25) S.T.R. 428 (Kar.)and Commissioner of Customs and Central Excise v. H.E.G Ltd., 2012 (277) E.L.T. 204 (Tri. - Del.). 3.4 The Learned Counsel further contended that as regards the demand for having availed CENVAT credit on the basis of documents which were not valid documents for availing CENVAT credit as they did not contain the serial number/invoice number, the Appellant in accordance with Rule 9(1)(f) of the Credit Rules, had rightly taken the CENVAT credit on the basis of invoices issued by the input service provider. Rule 9 (2) of the Credit Rules provides that all the particulars as prescribed in the Service Tax Rules should be present in the document. Though, as per Rule 4(A) of the Service Tax Rules, the serial number of the person receiving the taxable service have to be provided, however, non-compliance of these conditions does not make a document invalid for taking CENVAT credit. He further submitted that, while Rule 9(2) mandates the following of the Service Tax Rules, the proviso to Rule....
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....in the present case Manpower Recruitment and Supply Service cannot be said to be received by the appellant. In support of his submission, the Learned Counsel relied upon the following decisions:- • Commr. of Central Excise Vs. Computer Sciences Corpn. India P. Ltd - 2015 (37) S.T.R 62(AII.) • Commissioner of Service tax Versus Arvind Mills Limited 2014(35) S.T.R 496 (Guj) • Airbus Group India Pvt. Ltd. versus Commissioner of Service tax, Delhi 2016(45) S.T.R 120 (Tri Del.)., • I.T.C v. Commissioner of Service Tax, 2013 (29) S.T.R. 387 (Tri. Del.); • Paramount Communication v. CCE, 2013 TIOL-37-CESTAT-DEL • BMW India Pvt Ltd. v. Commissioner of Service Tax, 2013-TIOL-1407-CESTAT- DEL 3.6 The Learned Counsel further submitted that the demand was barred by limitation. The SCN has been issued under the provisions of Section 73 of the Act by invoking extended period of limitation of five years. He submitted that the demand confirmed in the impugned Order for SCN 1 is time barred for the period from 2008-09 to 2012-13, as none of the ingredients that are required for invoking the extended period for five yea....
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....to pay the tax and has failed to do so. He submitted that the activity of providing corporate guarantee for an associated enterprise without consideration does not qualify as a service hence, the appellant is not liable to pay service tax under reverse charge for import of service. Further, the conditions of the term loan along with the interest component are on prevalent base rate which are available to any of the applicants in the market. Thus, provision of corporate guarantee by Hatch Australia has not influenced the terms and conditions of the term loan provided by HSBC India to the Appellant. Hence, in the absence of any service tax liability for the relevant period, the question of the imposition of penalty for failure to pay service tax does not arise. He prayed for setting aside the confirmed demand, interest and penalties imposed under sections 76,77 and 78 of the Finance Act, 1994. 4. The Learned Authorized Representative for the department submitted that since the employees of the Appellant were using the accommodation for residential purpose, it cannot be said that these were used for providing any output taxable services by the appellant. As regards the meal voucher....
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....ervices (ii) availment of CENVAT credit on inadmissible documents (iii) non-payment of amount under rule 6(3)(i) of CENVAT credit rules. (iv) non-payment of service tax on manpower recruitment or supply agency services We take up for consideration each issue independently 5.1 Availment of credit on certain input services: In this regard, for ease of reference, the provisions of Credit Rules with respect to 'Input service' in the respective periods have been reproduced hereunder:- Period prior to 01.04.2011 the definition of Input service read as under- "(1) input service means any service- (1) used by a provider of a taxable service for providing an output service, or.... and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, co....
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....ion to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; [but excludes], - [(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part thereof, or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or] [(B) (services provided by way of renting of a motor vehicle), in so far as they relate....
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.... for denying the Cenvat credit on sodexo coupon and I do not find any fault in that and uphold the same." 5.3 As regards the period post 1.4.2011, there is a specific exclusion provided under clause C to Rule 2(I) that outdoor catering service, if used for personal use or consumption of any employee is not considered to be input service. Therefore, we do not find any infirmity in the impugned order in this regard. 5.4 As regards the credit availed on the accommodation provided to staff, the learned counsel for the appellant argued that the employees use the accommodation in their official capacity purely for business purposes. The service of accommodation was necessary for the purposes of providing the service of consulting engineering services and is integrally connected with the same. Perquisites are generally meant for the comfort, convenience and welfare of the employees. Even though it has been argued that perquisites do fall within the scope of input service, the benefit of Cenvat credit still cannot be allowed, as any activity for the comfort, convenience and welfare of its employees cannot be treated as having been done in course of furtherance of business. We find th....
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....all the particulars but contains the details of duty or service tax payable, description of the goods or taxable service, assessable value, Central Excise or Service tax Registration number of the person issuing the invoice, as the case may be, name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service, and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, he may allow the CENVAT credit" Therefore, notwithstanding that all the particulars mentioned in the Service Tax Rules are not mentioned, as long as all the particulars mentioned in the proviso to Rule 9(2) are mentioned, the invoice would be a valid document for taking CENVAT credit. A reading of Proviso to Rule 9(2) shows that following details have to be provided in the invoice: • Details of Service Tax payable • Description of taxable service • Assessable value • Service Tax Registration number of input....
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....ute. It has been argued before as that the detailed calculation was for the Cenvat credit reversal for the period 2008-09 to 2012-13. We note that in several decisions, it has been consistently held that when proportionate credit has been reversed the department cannot fasten liability under Rule 6(3)(i) of the Credit rules. We also find that our above views have been duly supported by the Coordinate Bench of this Tribunal who had examined the issue of the admissibility of Cenvat credit in similar cases where the inputs and/or input services were used in manufacture/provision of dutiable as well as exempted products/services. The Tribunal in its Final Order No.A/85696-85698/2022 dated 12.08.2022 in the case of M/s Responsive Industries Ltd. and Axiom Cordages Ltd. (supra) had examined the above issue in respect of the appellant who had reversed the Cenvat credit in respect of exempt services, by holding that inasmuch as the quantum or method adopted by the appellant was not questioned by the department, the demand of Cenvat credit cannot be sustained. The relevant paragraph of the case is given below: "22. We find, on-going through the records of the case and rival content....
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....d counsel that such secondment arrangements are liable service tax. However, he has also submitted that until the Supreme Court's decision in the case of CCE vs. Northern Operating System [2022 61 GSTL 129 (SC)], most Tribunal decisions in this regard were in favour of the appellant. Therefore, no malafide intention/ suppression could be attributed to the appellant. We find that on the invocation of extended period secondment arrangements, the Tribunal in the case of Dell International Services Pvt Ltd., vs CCE [2023-TIOL-295-CESTAT-BANG], relying on the Supreme Court's decision held as follows: "12. In so far as the invocation of the extended period of limitation in the show cause notice, the Supreme Court in Northern Operating System did not agree with the contention of the Department that it was correctly invoked and it was held that the Department was not justified in invoking the extended period of limitation. The relevant paragraphs of the judgment are as follows:- "62. The revenue's argument that the assessee had indulged in wilful suppression, in this court's considered view, is insubstantial. The view of a previous three judge ruling, in Cosmic Dy....